Arbitrum

Arbitrum is one of the largest Ethereum scaling networks, built as an optimistic rollup. It processes transactions on its own chain and posts the resulting data back to Ethereum, so users get much lower fees and faster confirmation while Ethereum remains the settlement and data availability layer.

The network was developed by Offchain Labs and launched its main chain, Arbitrum One, in 2021. It is fully EVM compatible, which means contracts written for Ethereum generally deploy without modification, and this compatibility is a large part of why it attracted applications quickly.

How optimistic rollups work

An optimistic rollup assumes submitted transaction batches are valid by default. Anyone can challenge a batch during a dispute window by submitting a fraud proof, and if the challenge succeeds the incorrect state is rejected. This is why withdrawals back to Ethereum involve a waiting period: the dispute window must pass before the withdrawal is final. Bridges offering instant withdrawals do so by fronting the funds and taking that timing risk themselves.

Arbitrum also runs Nova, a separate chain using a data availability committee for lower costs on high-volume applications like gaming and social, and Orbit, a framework for launching chains that settle to Arbitrum.

The ARB token

ARB is a governance token, distributed by airdrop in March 2023, with a maximum supply of 10 billion and roughly 6.61 billion circulating. It governs the Arbitrum DAO, which controls protocol upgrades and a substantial treasury. Notably ARB is not the gas token: fees on Arbitrum are paid in ether, so the token's role is governance and treasury control rather than network usage.